COLLEGE OF BUSINESS MANAGEMENT AND

ACCOUNTING SULTAN HAJI AHMAD SHAH CAMPUS

GROUP ASSIGNMENT

TRIMESTER 1 2022/2023

PROGRAMME : FOUNDATION IN ACCOUNTING

SUBJECT : PRINCIPLES OF MICROECONOMICS

CODE : ECMF013

TOPIC : PROTON SALES DURING COVID-19 IN 2021

NAME ID SECTION
MUHAMMAD AMMAR FARHAN BIN HALIMI AA1081806 01MT
LUQMAN NUR HAKIM BIN ZAKARIA AA1081835 01MT
MUHAMMAD FAIQ BIN HAWARI AA1081969 01MT
MUHAMMAD AMIRUL NAIM BIN MOHD ZAMZURI AA1082012 01MT
MOHAMAD AZRI AZWAN BIN RAMZAN AA1082111 01MT

LECTURER NAME : MOHAMAD SUKIMAN BIN ISHAK

SUBMISSION DATE : 27 OCTOBER 2022, BEFORE 12 PM (WEEK 8)

 ACKNOWLEDGEMENT

First of all, we are very grateful to Allah the Almighty for giving us the opportunity and
guidance to achieve our goal. He has given us strength and encouragement through all the
challenging moments to complete this dissertation. We are truly grateful for His unconditional
and endless love, mercy and blessing, that we have been finally able to accomplish this
assignment in the time given.

Besides that, we would like to thank our beloved lecturer Sir Mohamad Sukiman bin
Ishak because without his guide, we could not have done our assignment properly. He always
gives support and guidance to us on how to do our assignment in order to produce a good
outcome from research that has been studied.

Thirdly, we would like to thank our friends that have been helping us to complete our
assignment. Without you guys, we cannot manage to finish our assignment completely. To our
beloved parents, thank you for always being there for us and all the prayers that you have done.
Your support really gives us the strength to accomplish our task.

Lastly, we would also like to thank everyone directly and indirectly to those who had
been helping us all this while. May Allah bless and have mercy on us.
 Table of Contents

Acknowledgement i

Table of Contents ii

1. Introduction 1
2. Background 2
3. Market Structure 4
3.1 Number of producers in market 4
3.2 Mutual interdependence 5
3.3 Differentiated products 6
3.4 High barrier to entry 7
4. Article Regarding PROTON During Pandemic Covid-19 8
5. Summary of Article 11
6. Discussion of Article 12
6.1 Amount and types of cars sold 12
6.2 Market shares 13
6.3 Supply and demand of cars 14
7. Conclusion 16

References

Bibliography

Appendices
 Table of Contents

TABLE 1: TYPES OF CARS SOLD BY PROTON IN MALAYSIA IN 2022 3

TABLE 2: MARKET SHARES OF CAR COMPANIES (%) 4

TABLE 3: PROTON CAR SALES IN JANUARY 2020 AND 2021 12

TABLE 4: MARKET SHARES (%) 14

GRAPH 1: THEORETICAL SUPPLY AND DEMAND CURVE OF PROTON CARS

IN JANUARY 2021 15

Appendix i: TABLE: PRODUCTION AND SALES OF VEHICLE

FOR JANUARY 2021 IN MALAYSIA

Appendix ii: LINE CHART: NATIONAL AND NON-NATIONAL

CAR BRANDS MARKET SHARE, 2001 – 2020

Appendix iii: BAR CHART: PROTON CAR SALES IN JANUARY 2020 AND 2021

Appendix iv: BAR CHART: MARKET SHARES (%)

Appendix v: TABLE: NUMBER OF CAR SALES IN MALAYSIA

1.0: INTRODUCTION

In line with the 4.0 Industrial Revolution, the world is moving towards modernization
where technology develops in parallel with the development of the revolution. This
development has a direct impact on various industries including the transport sector. This
sector is one of the sectors that has a positive impact on the country's economic progress.

The increasingly sophisticated level of technology is thriving along with the rapid
development of the transport sector. this can be proven by the level of progress that
happened to the car. While in the past, people had to use horse-drawn carriages as transport,
now there are cars that use fossil fuel sources and solar energy to transport humans and
ease movement, especially for long distance movement. This clearly proves that the
advancement of car technology has developed very much along with the passage of time.

Karl Benz patented the three-wheeled Motor Car, known as the

"Motorwagen," in 1886. It was the first true, modern automobile,
meaning Benz is most often identified as the man who invented the car.
Benz also patented his own throttle system, spark plugs, gear shifters,
a water radiator, a carburetor and other fundamentals to the
automobile. Benz eventually built a car company that still exists today
as the Daimler Group.1

In 1886, the first automobile was invented by Karl Benz. (Cox, 2022). Since then, the
progress of this transport sector is greatly aided by various automobile companies that
produce various types of cars. For example, Audi-branded cars have undergone various
modifications in terms of the shape of the car as well as the sophistication of the car's
interior technology. There are various car companies that help a lot in the effort to improve
the progress of this sector. Among the automobile companies that have succeeded in
increasing the country's economic progress with the sale of their cars is the PROTON
company.

1
Cox, L., (2022). “Who invented the car?”. Live Science. 25 March 2022. https://www.livescience.com/37538-
who-invented-the-car.html [Accessed 22 October 2022]
2.0: BACKGROUND

In 1979, the Deputy Prime Minister at the time Tun Dr. Mahathir
presented the concept of a “Made in Malaysia” car to the
Cabinet. The project was approved in 1982 and Proton was later
founded on 7 May 1983. Proton was headed by Tun Dr. Mahathir,
who by then was Prime Minister. It was owned by Khazanah
Nasional, which is Malaysia’s sovereign wealth fund. Proton
started its journey by partnering with Mitsubishi Motors to
produce its first car, which led to the launch of the Proton Saga
on 9 July 1985.
Proton has been facing some difficulties over the years which
lead to its shrinking market share. And that has been the case
even after Khazanah sold Proton to DRB-HICOM. In 2016, the
government granted the company a soft loan of RM 1.5 billion
with one of the conditions being a mandatory tie-up with a
foreign automobile company. While several companies have
expressed interest, DRB-HICOM finally sold 49.9-percent of its
stake in Proton to Chinese carmaker Geely in June 2017. With
Geely’s assistance, Proton has produced two brand new models:
the Proton X70 in 2019 and the X50 in 2020. The X70 is a C-
segment SUV based on the Geely Boyue.2

Based on the quotation, PROTON (Perusahaan Otomobil Nasional) was founded by the
idea of Tun Dr. Mahathir Mohamad on the 7th of May 1983. PROTON, which partnered
with Mitsubishi Motors, launched its first car on 9 July 1985. The car was named
PROTON Saga. Several early PROTON cars such as Saga, Iswara and Wira were instant
hits among Malaysians. (Cheong, 2015).

However, PROTON later faced some difficulties in several years and that issue affected
its market share in the car industry. KHAZANAH later sold the company to DRB-
HICOM Berhad. The Malaysian government also granted to PROTON a soft loan of RM
1.5 billion in exchange for PROTON being tied with another foreign automobile
company other than DRB-HICOM in 2016. In 2017, DRB-HICOM had sold 49.9% of
its shares in PROTON and all of PROTON shares in Lotus, a British automobile
company to a Chinese automobile company named Geely. (Horrell, 2017). PROTON
continued to manufacture new cars such as X70 and X50.

2
Sundralingam, D., (2022). “The History of Proton: Malaysia’s First National Carmaker”. CARSOME. 10 March
2022. https://www.carsome.my/news/item/the-history-of-proton [Accessed 19 October 2022]
 TABLE 1: TYPES OF CARS SOLD BY PROTON IN MALAYSIA IN 20223

Table 1 shows the types of cars which are sold by PROTON in Malaysia in the year 2022.

PROTON X70 1.8 Premium 2WD has the highest price among the cars. The price of the
proton car without insurance is RM128,800 while the estimated premium insurance price
is RM4,223.90. This car is Dual-Clutch Transmission (DCT). DCL is a type of multi-
speed vehicle transmission system, that uses two separate clutches for odd and even gear
sets.

PROTON Persona Premium has the median price among the cars. The price of this car
without insurance is RM58,300 while the estimated insurance premium is RM1,920.05.
This car is a Continuously Variable Transmission (CVT). CVT is an automatic
transmission that can change seamlessly through a continuous range of gear ratios.

Proton Saga Standard is the cheapest car among the cars. The price of this car without
insurance is RM34,800 while the estimated insurance premium is RM1,225.85.

To conclude, the price of PROTON cars is ranging from Saga Standard as the cheapest,
Persona Premium as the median and X70 as the most expensive type.

3
Nazri, (no date). “Goh Family Motors Sdn. Bhd”. Proton Car. https://protoncar.com.my/ [Accessed 15
October 2022]
3.0: Market Structure

PROTON operates within an oligopoly style of market structure. Oligopoly is a market

structure when there are only few numbers of firms that dominate a large market. Demand
for cars in Malaysia is very high but there are limited numbers of firms supplying cars to
the citizens of Malaysia because of several main factors influencing the market. (Choo et
al., 2018)

3.1: Number of producers in market

The market share of cars in Malaysia is dominated by two local companies, PROTON
and Perusahaan Otomobil Kedua Sendirian Berhad (PERODUA). Although with such
a large share, PROTON by itself could not fulfil the demand of cars in Malaysia.
(Shariffah, 2013). Beside PROTON and PERODUA, there are also other foreign
automobile companies which sell cars in Malaysia such as Toyota, BMW, Mazda,
Nissan, Audi and Volvo. (Tan, 2014).

Rank Manufacturer Total Market Share (%)

2010 2011 2012
1 Perodua 34.7 33.6 34.1
2 Proton 28.9 29.6 26.3
3 Toyota 13.1 11.9 13.3
4 Honda 8.2 6.1 6.3
5 Nissan 4.8 4.8 4.9

TABLE 2: MARKET SHARES OF CAR COMPANIES (%)4

Table 2 shows the total market share of 3 automobile companies in Malaysia in the
year of 2010, 2011 and 2012.

4
Tan, J.S.L., (2014). “PROTON (automobile)”. Microeconomics Individual Assignment. 7 January 2014.
https://jessietansiewlynn.blogspot.com/2014/01/proton-automobile.html [Accessed 15 October 2022]
 As seen, PERODUA was ranked first among the other company due to its high market
share, 34.7% in 2010. In 2011, the company market share dropped to 33.6% but still
maintain the top and the total market share increased to 34.1% in 2012. PERODUA
still had the highest market share compared to PROTON which ranked number 2 in
the market share table.

Toyota, a Japanese automobile company was ranked in the middle between PROTON
and NISSAN with the total market share in 2010 is 13.1%, 21.6% lower than
PERODUA. In 2011, its market share decreased to 11.9% but in 2012, Toyota rose
and performed better from the previous year and managed to get 13.3% in their market
share.

Nissan, an automobile company that originated from Japan, had the lowest market
share in 2010 compared to the other company. It is stated in Table 2 that Nissan only
managed to get 4.3% in their market share in 2010. In 2011, Nissan only managed to
maintain its market share as in 2010 which was 4.3%. In 2012, Nissan managed to
increase its market share by 4.9%.

To sum everything up from year 2010 until 2012, it could be said that PERODUA has
the highest market share, 34.1%, followed by PROTON, 29.3%, TOYOTA was
ranked third in the table with the market share 13.3%, followed by HONDA company,
6.3% and the last one is NISSAN with the market share 4.9%.

3.2: Mutual interdependence

Besides that, the changes in price and quantity produced by other

competitors can greatly affect PROTON’s profits therefore
PROTON should achieve the 2 types of interdependencies which
is to cooperate with one another (collusion) or to compete with
one another (non-collusion). An example of collusion is
PROTON’s collaboration with Mitsubishi Motors to produce the
first Malaysian car, Citroen, Youngman and Honda.5

5
Tan, J.S.L., (2014). “PROTON (automobile)”. Microeconomics Individual Assignment. 7 January 2014.
https://jessietansiewlynn.blogspot.com/2014/01/proton-automobile.html [Accessed 15 October 2022]
 Mutual interdependence is one of the characteristics of oligopoly. PROTON must
consider the actions of its rivals like Mazda or Toyota in every term such as price,
output, sales and advertising as PROTON is affected by these actions. (Choo et al.,
2018). Based on the quotation, PROTON sometimes collaborates with other
companies. For example, PROTON collaborated with Mitsubishi Motors to produce
its first car, PROTON Saga (Sundralingam, 2022).

It has been reported that sales of Proton decreased in August

2013 due to strong sales comeback of Honda. When the
government reduce import tariff on foreign cars, Proton coped
with the situation by producing its own engine called CamPro
engine to reduce cost of production.6

Other than cooperation, PROTON is also involved in competition with other

companies. Companies in oligopoly are price makers, which means companies have
some control over price compared to price takers. PROTON must consider the
decisions of its rivals as well in making its own decisions. (Shariffah, 2013). Based
on the quotation, in 2013, sales of PROTON decreased because of the action of Honda.
In general, PROTON usually set the price of its cars lower than other companies to
attract more local consumers. (Tan, 2014).

3.3: Differentiated products

For the automobile industry like PROTON, the product, car is differentiated. The
reason of the differentiation is to appeal to the needs of different kind of customers,
each of them with different wants. Differentiated products like cars are manufactured
are for personal consumption of customers. (Shariffah, 2013). The products are
differentiated through ways such as advertisement, shape, material and branding.

6
Shariffah Hazatul Shahiera (2013). “Proton Microeconomics”. Microeconomics Weblog. 24 October 2013.
https://shrffhhazatul.wordpress.com/2013/10/24/proton-microeconomics-3/ [Accessed 15 October 2022]
 3.4: High barrier to entry

Barriers can be caused by the economies of scale of Proton. In

early establishment, Proton enjoys economies of scale whereby
Proton’s adviser, Tun Dr. Mahathir Mohamad approaches
Mitsubishi Motors Corporation and signs an agreement upon
production of the first national cars. Through this agreement,
Mitsubishi Motors supply parts and technologies to Proton.
Under the agreement, Proton’s employee was also sent to Japan
to increase skilled labour. Proton owns a manufacturing plant in
Shah Alam and later on opens another manufacture plant in
Tanjung Malim allowing it to produce at lower cost of production.
Furthermore, the Malaysian government protection over Proton
and Perodua has made it harder for new firms to enter as the
main purpose of Malaysian government is to succeed national
cars out in the market. Tariffs set by the government also restrict
new firms to enter. All these barriers have made it quite difficult
for new firm to enter the market of automobile in Malaysia.7

For oligopoly, barriers to enter the industry are high, albeit not as high as in monopoly,
which is practically impossible. The reasons of such barriers in the automobile
industry are economies of scale, high capital requirement and legal restrictions (Choo
et al., 2018). To start a new automobile company in the likes of PROTON would
require a huge capital needed to start producing cars. For economies of scale,
PROTON managed to increase its marketing economies by having suppliers, such as
Mitsubishi Motors in the early days of PROTON, allowing PROTON to buy materials
in bulk. The deal with Mitsubishi Motors in the early days of PROTON also allowed
PROTON to increase its labour economies by having more skilled labour, increasing
its economies of scale.

In the past, the government of Malaysia had set up legal restrictions on companies
other than PROTON and PERODUA to protect the interests of these national
companies. The legal restrictions were usually in the form of tariffs and high
bureaucratic issues. As a result, it was harder for foreign companies such as Toyota
and Nissan to enter the market of automobile in Malaysia in the past. In 2003, the
ASEAN Free Trade Area (AFTA) reduced the import tariff on foreign cars, reducing
the demand for PROTON cars. (Tan, 2014).

7
Shariffah Hazatul Shahiera (2013). “Proton Microeconomics”. Microeconomics Weblog. 24 October 2013.
https://shrffhhazatul.wordpress.com/2013/10/24/proton-microeconomics-3/ [Accessed 15 October 2022]
4.0: Article Regarding PROTON During Pandemic Covid-19

The article is taken from PROTON, dated on the 2nd of February 2021. (Rusmaalee, 2021).

PRESS RELEASE

2 Feb 2021

CAR SALES IN JANUARY DOWN AS MCO EFFECT FELT

- PROTON’s 5,964 unit sales a decrease of 29.9% over the same month last year
- New model launch plans unchanged as company pursues growth in 2021

Subang Jaya, 02 February 2021 - As Malaysians live through a second Movement

Control Order (MCO) to help bring Covid-19 infection rates down, the economic effect on
various industries is being seen. Malaysia’s automotive sales for January is forecast to be
slightly above 32,000 units, corresponding with a major drop in volume for most major
players.

PROTON finished the month ranked second by delivering 5,964 units. This represents a
sales decrease of 29.9% compared to January 2020. Market share is estimated at 18.5%,
about 1.0% less compared to the same period last year. The overall figures though are a
reflection of supply not being able to meet demand rather than a reduction in bookings.

SUVs and Proton Saga continue to lead sales

Leading PROTON’s sales in January was the venerable Proton Saga. With 2,583 units
delivered it was the second most popular A-segment sedan in the country. The Proton X70
and Proton X50 SUV twins continued to lead the C-segment SUV and B-segment SUV
(five-seat) categories though registered units were down to 892 and 1,082 units
respectively. For the latter, a total of 4,809 units have been delivered since the official
launch on 27 October last year.
Other models posted similar performances. The Proton Persona finish second in the B-
segment sedan category while the Proton Exora maintained its standing as the best-selling
C-segment MPV in the country. The Proton Iriz ended January in third place for B-segment
hatchbacks.

“January was a difficult month for Malaysia’s automotive industry. Hopes were high the
momentum built at the end of 2020 would be carried forward especially after the
announcement of PENJANA incentives remaining in place until the end of June this year.
Unfortunately, the second MCO announcement put a damper on those hopes.

“Still, PROTON as well as the rest of the industry is in full support of all measures the
government has in place to control the rate of infection. The safety of all Malaysians needs
to remain as the main priority and companies need to pivot in order to achieve their goals
in a changed market environment,” said Roslan Abdullah, Chief Executive Officer, Proton
Edar.

Coronavirus takes effect on production volume

While PROTON’s order book remains healthy with orders carried over from the end of
last year, the company is still working hard for supply to catch up to demand. As an
industry that depends on a global supply chain, automotive companies are acutely affected
by delays to vendors that have a knock-on effect to their production lines.

“Measures like the MCO have naturally affected the number of customers coming to
showrooms, but we can receive bookings online helping to boost our sales. However, our
supply lines have been disrupted over the last few months by the coronavirus making it
difficult to ensure a steady flow of parts needed to build our cars. It’s something all car
manufacturers have been facing for the past year, but we are hopeful that with the arrival
of a vaccine things will stabilize by the middle of the year,” said Roslan Abdullah.
Despite the delays, PROTON intends to pursue its product launch plans for 2021 as the
company strives for more sales growth both domestically and abroad.

“For now, PROTON will stick to its 2021 product launch schedule. We have an exciting
series of improved products in the pipeline while the Proton X50 will now be able to
establish its standing in the market by benefitting from a full year of sales. There will
undoubtedly be more challenges ahead until the world is able to control the spread of the
virus but we are aware this is now the new norm for doing business and the onus is on us
to innovate our operations to better serve our customers,” he added.

-End-

PROTON January 2021 – Individual Model Performance

Model No of units Sales achievement for January 2021

sold

Saga 2,583 ▪ 2ndhighest volume A-segment sedan

Persona 970 ▪ 2nd highest volume B-segment sedan

Exora 153 ▪ Highest volume C-segment MPV

Iriz 283 ▪ 3rd highest volume B-segment hatchback

X70 892 ▪ Highest volume C-segment SUV

X50 1,082 ▪ Highest volume B-segment (five-seat)

SUV

Total *5,964

*sales of other models not listed added to the total sales figure
5.0: Summary of Article

From the article on the 2nd of February 2021, the car sales of PROTON in January 2021
were less than the number of cars sold during January 2020 with decrease of 29.9% from
January 2020. This means that the number of cars sold in January 2021 was 5964 units,
compared to 8508 units sold in January 2020. The sales of cars in January 2021, 5964 units
was far below the forecasted sales, slightly above 32000 units.

Moreover, the types of cars sold in January 2021 were 2583 PROTON Saga, 970 PROTON
Persona, 153 PROTON Exora, 283 PROTON Iriz, 892 PROTON X70, 1082 PROTON
X50 and 1 unspecified model of PROTON. The total number of cars sold by PROTON
was 5964 units.

As a sidenote, the article mentioned that PROTON market share in January 2021 was
18.5%, compared to 18.6% market share in January 2020, with about 1% difference.

Furthermore, it is mentioned in the article that the reason of the decrease in sales was
because supply of cars decreased. This was because Proton Holdings had to shut down
production of some factories and the number of workers working at the same time had to
be reduced as well as dictated by government decree, the Movement Control Order (MCO).
The MCO was dictated by the government in response to the widespread of pandemic
Covid-19.

Lastly, the article also mentioned that the supply issue of cars did not only happen to
PROTON, but other automobile companies in general. PROTON planned to stick to its
2021 plans and predicted that the supply issue will be over with the mass distribution of
vaccine in the middle of 2021.
6.0: Discussion of Article

From the article dated 2nd of February 2021, there are several parts that could be discussed
and elaborated to give further understanding to the readers about the situation of PROTON
during the pandemic Covid-19.

6.1: Amount and types of cars sold

The article wrote about the amount of PROTON cars sold in January 2020, PROTON
prediction of car sales in January 2021 and the real total cars sold in January 2021.
Furthermore, the data for PROTON car sales in January 2021 was broken down into
different types of PROTON cars.

Period January 2020 January 2021 January 2021

Forecast
Saga * * 2583
Persona * * 970
Exora * * 153
Iriz * * 283
X70 * * 892
X50 * * 1082
Other * * 1
Total 8508 32000 5964

TABLE 3: PROTON CAR SALES IN JANUARY 2020 AND 2021

Table 3 shows the total amount of sales of PROTON cars in January 2020, forecast of
January 2021 and real January 2021. Table 3 also shows the types of PROTON cars
sold in January 2021.
 In 2021, the data shows that the number of PROTON sales in January 2021 has
decreased by 2544. In January 2020, PROTON has sold 8508 cars. PROTON has
made a prediction that PROTON will be sold as many as 32000 in January 2021 but
Proton cars can only be sold as much as 5964 in that month.

There were several PROTON cars that were successfully sold that month. Among
them were the Saga, Persona, Exora, Iriz, X50 and X70. The Saga car was the most
sold car that month. It was sold as many as 2583. The X50 was also the second most
sold which was as many as 1082 units.

Next, the Persona car was the median of PROTON's car sales that month at 970 units.
The X70 was also among the median car sales that month at 892 units.

In addition, there are also PROTON cars that were sold the fewest in that month. The
Exora car was the least sold at 153 units. The Iriz was also among the least sold at 283
units. There was also 1 unspecified PROTON car sold that month.

To sum up, the total sales of PROTON cars in January 2021 is lower than the
prediction of sales in January 2021 and sales in January 2020. For January 2021,
PROTON Saga and PROTON X50 have the highest sales, followed by PROTON
Persona and PROTON X70, and the lowest sales belong to PROTON Iriz, PROTON
Exora and 1 other unspecified car.

6.2: Market shares

The article also wrote about the market shares of PROTON in January 2021 compared
to market shares of PROTON in January 2020.
 Period January 2020 January 2021
Market Share (%) 18.6 18.5

TABLE 4: MARKET SHARES (%)

The table above shows the comparison of market shares of PROTON company in
January 2020 and January 2021.

In January 2020, 2 months before the MCO started, it was stated that the market share
of PROTON is 18.6% due to its high sale in that month. Unfortunately, after the
pandemic Covid-19 affect the world, almost all company, including foreign company
cannot manage their finance well.

In January 2021, the market structure of PROTON still managed to overall maintain
its market shares although the data dropped 0.1% from the previous year, 18.6%
dropped to 18.5% due to the Pandemic Covid-19 and MCO.

In conclusion, it is definite that pandemic Covid-19 and MCO affected PROTON

market shares. In January 2020, PROTON market share was 18.6% but in January
2021 PROTON market share dropped to 18.5%, decreased 0.1% in total.

6.3: Supply and demand of cars

The article also mentioned about the reason of the low sales of PROTON cars was
because of the decrease in the supply of cars rather than the decrease of demand of
PROTON cars from consumers. This issue also occurred to other automobile
companies as well during the pandemic Covid-19.
 GRAPH 1: THEORETICAL SUPPLY AND DEMAND CURVE OF PROTON
CARS IN JANUARY 2021

Graph 1 shows the theoretical supply and demand curve of PROTON cars in January
2021.

Based on Graph 1, it could be mentioned that the supply curve shifted from S1 to S2
to the left. This means that the supply of PROTON cars decreased in January 2021.
Meanwhile, the demand curve remained unchanged in January 2021.

Next, while the demand of PROTON cars remained the same, the market equilibrium
changed as interception of the new supply curve and the demand curve changed. As
the quantity supplied and demanded of PROTON cars decreased, the price of
PROTON cars increased. PROTON made an initiative by allowing customers to do
online booking to attend the showrooms.

To sum up everything, it can be concluded that the demand for PROTON cars in
January 2021 decreased due to pandemic Covid 19 and the Movement Control Order
by the government. As the supply decreased, the quantity of cars decreased while the
price of cars increased.
7.0: Conclusion
Based on our research and analysis, we have come to an indisputable conclusion stating
that the market structure of PROTON is oligopoly, which means that the market structure
has a few numbers of firms dominate a large market. As an example, PROTON tried to
differentiate themselves from the competitors in the automotive industry such as local
automotive company and international automotive companies. Furthermore, PROTON
makes decision based on the action of its competitors, as shown by its strategy to lower
the prices of PROTON cars after the reduction of import tariff to Malaysia in 2013.

Based on the data from the research, it can be concluded that the sales of PROTON cars
dropped during January 2021 compared to January 2020. This was because Proton
Holdings had to shut down production of some factories and the number of workers
working at the same time had to be reduced as well as per government’s decree. As the car
supply decreased, the quantity of PROTON cars decreased. Despite that, PROTON
finished the month ranked at the second place compared to other car companies by
delivering 5964 units of cars. (Tan, 2021).

Bigger news for the supply side, because if there are no cars,
there’s no point in showrooms reopening. The PM has
announced that factories in the non-essential categories can
resume operations in all phases of the PPN. Operation capacity
is according to the vaccination rate among staff – 60%
operations for a 40-59% rate, 80% for 60-79% and the full 100%
for companies that have vaccinated 80% and above of their staff.8

On the 14th of August 2021, the government announced the reopening of factories if all
non-essential categories including cars and car showrooms in areas with more than 50%
vaccination rate. (Tan, 2021). With the reopening of industries, PROTON managed to
resume its production and ending its supply chain in Malaysia and internationally,
restroing the supply line to the condition before the Movement Control Order by August
2021. (Tan, 2021). To summarize, PROTON has the capability to cope with a disaster such
as the pandemic Covid-19 and is predicted to grow for the foreseeable future.

8
Tan, D., (2021). “Car factories can operate; showroom visits, car wash allowed for fully vaccinated in Phase 1
PPN states”. paultan.org. 15 August 2021. https://paultan.org/2021/08/15/car-factories-can-operate-
showroom-visits-car-wash-allowed-for-fully-vaccinated-in-phase-1-ppn-states/ [Accessed 24 October 2022]
References

Cheong, H., (2015). “30 Years of Proton – Tracing Back to a Time When Malaysians
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 Appendix i

TABLE: PRODUCTION AND SALES OF VEHICLE FOR JANUARY 2021 IN

MALAYSIA

Lim, A., (2021). “January 2021 Malaysian vehicle sales down by 52.3%”. paultan.org. 22
February 2021. https://paultan.org/2021/02/22/january-2021-malaysian-vehicle-sales-down-
by-52-3/
 Appendix ii

LINE CHART: NATIONAL AND NON-NATIONAL CAR BRANDS MARKET SHARE,

2001 – 2020

Tan, D., (2021). “Malaysian vehicle sales data for Jan 2021 by brand – Perodua’s share above
50%, national brands at 70%”. paultan.org. 23 February 2021.
https://paultan.org/2021/02/23/malaysian-vehicle-sales-data-for-jan-2021-by-brand-peroduas-
share-above-50-national-brands-at-70/
 Appendix iii

PROTON Unit Sales

35000

30000

25000

20000

15000

10000

5000

0
Jan-20 Jan-21 Forecast Jan-21

All Saga Persona Exora Iriz X70 X50 Other

BAR CHART: PROTON CAR SALES IN JANUARY 2020 AND 2021

 Appendix iv

PROTON Market Share

1862.00%
1860.00%
1858.00%
1856.00%
1854.00%
1852.00%
1850.00%
1848.00%
1846.00%
1844.00%
Jan-20 Jan-21

Market Share (%)

BAR CHART: MARKET SHARES (%)

 Appendix v

TABLE: NUMBER OF CAR SALES IN MALAYSIA

Tan, D., (2021). “Malaysian vehicle sales data for Jan 2021 by brand – Perodua’s share above
50%, national brands at 70%”. paultan.org. 23 February 2021.
https://paultan.org/2021/02/23/malaysian-vehicle-sales-data-for-jan-2021-by-brand-peroduas-
share-above-50-national-brands-at-70/